Index  Changes with immediate effect (from ).  Changes effective from  Changes from the enactment of Finance Bill.  Changes with date to be notified.  Other. 2

 The period for taking Cenvat Credit is being extended from six months from the date of invoice to one year from the date of invoice.  Credit of input and capital goods(50%) available upon delivery/ receipt directly at the job worker’s premises on direction of the manufacturer / output service provider.  Cenvat credit of inputs allowable even on transfer to subsequent job worker from the premises of the principal job worker for undertaking specified activities, provided the same are received back within 180 days. 3

 Increase in time limit for return of capital goods sent to job worker for carrying out specific activities from 180 days to 2 years.  Power of recovery of Cenvat credit extended even to cases where Cenvat credit has been wrongly taken but not utilized.  Cenvat credit utilized shall for a month shall be in following order First – Opening Balance of the month. Second – Admissible credit taken during the month. Last – Inadmissible credit taken during the month. 4

 Registration for single premises shall be granted within two days of filing the application.  Liability of payment of service tax on aggregator of a service where service is provided under the brand name of the aggregator. Meaning of Aggregator – “Aggregator” means a person, who owns and manages a web based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator.  Advance Ruling has been extended to all resident firms (earlier allowed only to company). 5

 Change in rate of abatement in case of GTA- At present abatement of 75% is available under GTA. This has been reduced to 70% which will make effective rate from 3.09% to 3.708%. Further after increase in rate of tax from 12.36% to 14% this will further increase to 4.20% from the date to be notified. Exemption to services provided by a performing artist in folk or classical art form of (i) music, or (ii) dance, or (iii) theatre, will be limited only to such cases where amount charged is up to Rs 1,00,000 for a performance.  Exemption to artist 6

 Exemptions withdrawn  Exemption to construction, erection, commissioning or installation of original works pertaining to an airport or port is being withdrawn.  Exemption is being withdrawn on the following service: a) services provided by a mutual fund agent to a mutual fund or assets management company, b) distributor to a mutual fund or AMC, c) selling or marketing agent of lottery ticket to a distributor  Exemption to transportation of food stuff Exemption to transportation of food stuff by rail, or vessels or road will be limited to food grains including rice and pulses, flour, milk and salt. (e.g. – tea, coffee, sugar, edible oil now taxable). 7

 Exemption of construction/maintenance services to Government Following Exemptions given in clause 12 of exemption notification no. 25/2012 has been withdrawn:-  Exemption given for construction/ maintenance services for a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession has been withdrawn.  A structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment.  A residential complex predominantly meant for self- use or the use of their employees. 8

 Exemption available on specified services of construction, repair, maintenance, renovation or alteration service provided to the Government, a local authority, or a governmental authority shall be limited only to:- Historical monument, archaeological site or remains of national importance, archaeological excavation or antiquity; canal, dam or other irrigation work; and pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal. 9

Following services have been exempted : -  Transportation of a patient to and from a clinical establishment by a clinical establishment.  Life insurance service provided by way of Varishtha Pension Bima Yojna.  Pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables.  Admission to a museum, zoo, national park, wild life sanctuary and a tiger reserve.  Exhibition of movie by the exhibitor (theatre owner) to the distributor or an AOP consisting of such exhibitor as one of it’s members  Transport of export goods by road from the place of removal to a land customs station.  Service by a Common Effluent Treatment Plant operator  Exemptions allowed on new services 10

 Credit of ST paid under partial reverse paid by the service receiver allowed on payment of Service tax without linking it to the payment to the service provider.  Credit of ST paid under partial reverse  Partial Reverse charge to Full reverse charge  Manpower and Security Supply services which are presently covered under partial reverse charge has been shifted to full reverse charge. 11

Nature of Service Present rate of reverse charge Present Effective rate Change in rate of reverse charge (from 01/04/2015) Effective rate from 01/04/2015 Proposed rate from the date to be notified Manpower Supply & Security Services 75%9.27%100%12.36%14.00% 12

13

14

Nature of OffenceDescription Duty & Interest Penalty Limit Cases not involving fraud or collusion or willful misstatement or suppression of facts or contravention of any provision of the Act or rules with the intent to evade payment of service tax Normal PenaltyYes 10% of S.Tax amount involved if service tax and interest is paid within 30 days of issuance of notice under section 73 (1) YesNil if the service tax, interest and reduced penalty is paid within 30 days of order Yes 25% of the penalty imposed in the order if the service tax amount gets reduced in any appellate proceeding penalty amount shall also stand modified accordingly and benefit of reduced penalty ( 25% of penalty imposed) shall be admissible 15

16 CA KRISHAN GARG

Nature of OffenceDescription Duty & Interest Penalty Limit cases involving fraud or collusion or willful misstatement or suppression of facts or contravention of any provision of the Act or rules with the intent to evade payment of service tax Normal PenaltyYes 10o% of S.Tax amount involved if service tax, interest and reduced penalty is paid within 30 days of service of notice Yes 15% of the service tax amount if the service tax, interest and reduced penalty is paid within 30 days of order Yes25% of the S.tax amount if the service tax amount gets reduced in any appellate proceeding penalty amount shall also stand modified accordingly and benefit of reduced penalty ( 25% of penalty imposed) shall be admissible 17 CA KRISHAN GARG

 Amended provisions of section 76 and 78 shall apply to cases where either no notice is served, or notice is served under sub section (1) of section 73 or proviso thereto but no order has been issued under sub section (2) of section 73, before the date of enactment of the Finance Bill,2015; and  In respect of cases covered by sub-section (4A) of section 73, if no notice is served, or notice is served under sub section (1) of section 73 or proviso thereto but no order has been issued under sub section (2) of section 73, before the date of enactment of the Finance Bill,2015, penalty shall not exceed 50% of the Service Tax amount. 18 CA KRISHAN GARG

It is being prescribed specifically in this section that consideration for a taxable service shall include all reimbursable expenditure or cost incurred and charged by the service provider. Effect :- All the reimbursable claimed by the service provider will form part of taxable service and will be charged to service tax. 19

Present Rate of S.Tax 12.36% (Including Cess) Proposed Rate of tax (Without Swachh Bharat Cess) 14.00% Proposed Rate of tax (With Swachh Bharat Cess) 16.00% 20

 Service Tax will have to be until the rate of tax is increased to 14%  Ed. Cess (2% of Tax) and Higher Ed. Cess(1% of tax) proposed to be withdrawn from a date to be notified hence it is required to be charged at present.  Swachh Bharat Cess is proposed to be levied on value of taxable service hence it will increase the rate of tax by 2%. Thus effective rate would be 16%. This cess will be levied on selected services. 21

Service by way of access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks and theme parks were covered under negative list of services. Now this is no more covered in negative list which means now these services now will be liable to be taxed. 22

Admission to entertainment events like Musical performances, award functions etc. will be liable to pay tax if the amount charged is more than Rs. 500/-. However entertainment event, namely, exhibition of cinematographic film, circus, recognized sporting event, dance, theatrical performance including drama and ballet continued to be exempted. 23

Any process amounting to manufacture or production of goods is not liable to be taxed however Intermediate production of alcoholic liquor for human consumption is proposed to be excluded from the exemption notification which will make contact manufacturing or job work for production of potable liquor will become taxable. 24

Presently Services provided by Government or Local Authority are covered under negative list which means there were not taxable. An exception to this provision was support services provided by Government or Local Authority. Now this entry has been withdrawn. Effect:- Every service provided by Govt. or Local Authority will be taxable unless it is given specific exemption. 25

To overcome from the contradictory decisions of various courts an explanation has been added in entry (i) of section 66D to confirm the levy of tax on:- (a) chit fund foremen by way of conducting a chit. (b) distributor or selling agents of lottery, as appointed or authorized by the organizing state for promoting, marketing, distributing, selling, or assisting the state in any other way for organizing and conducting a lottery. 26

Difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such tickets will be liable for service tax payment. 27

 GST FM has confirmed that GST will be implemented from 1 April  Digitally signed Invoice Central excise/Service tax assesses to be allowed to use digitally signed invoices and maintain record electronically. 28

29

Nature of Service Current effective rate W.e.f. 01/04/2015 Proposed rate from the date to be notified Services having normal rate of tax without abatement 12.36% 14.00% Domestic Air Travel Agent 0.618% 0.70% International Air Travel Agent 1.236% 1.442% Mandap Keeper8.652% 9.80% Accommodation Services in Hotels, etc 7.416% 8.40% GTA services by road 3.09%3.708%4.20% 30

Nature of Service Current effective rate W.e.f. 01/04/2015 Proposed rate from the date to be notified Renting of Motorcab4.944% 5.60% Transport of goods by vessel 4.944%3.708%4.20% Package tour3.09% 3.50% Hotel Booking1.236% 1.40% Construction of a complex, building, civil structure Carpet area of the unit is less than 2000 square feet and less than 1 crore 3.09% 3.50% Others3.708% 4.20% 31

- Mobile